Japanese Court Finds Ex-Mt. Gox CEO Guilty of Record Tampering

Japanese Court Finds Ex-Mt. Gox CEO Guilty of Record Tampering

Mark Karpeles — the former CEO of the now-defunct Bitcoin (BTC) exchange Mt. Gox — has received a suspended jail sentence after being found guilty of tampering with financial records. The news was reported by Bloomberg on March 15.

The Tokyo District Court has reportedly found Karpeles guilty of mixing his personal finances with those of the exchange in order to conceal the platform’s losses to hackers. He received a two and a half years jail sentence, which he will not have to serve unless he commits another offence within four years.

“The charge of electronic record tampering is true and deserves punishment, but there’s no criminal evidence of embezzlement.”

As previously reported, Mt. Gox was hacked in 2011, with around 24,000 creditors reported to be affected. The subsequent collapse of the exchange in early 2014 led to loss of a reported 850,000 Bitcoin (BTC), valued at roughly $460 million at the time (~$3.3 billion at press time).

While the fraud and embezzlement charges were not related directly to the theft, Karpeles’ conduct in the wake of the platform’s hack has sparked suspicion. In summer 2015, just before the charges were brought against him, Karpeles purportedly found 200,000 of the missing BTC in a cold storage.

Bloomberg cites the court as stating that it could not “look lightly upon the criminal responsibility of the defendant,” accusing Karpeles of causing “massive harm to the trust of his users”:

“[T]here is no excuse for the defendant, who is an engineer with expert knowledge, to abuse his status and authority to perform clever criminal acts.”